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HomeMy WebLinkAboutResolution No. 263-24 (EDA24-011) (4B) - Resolution (EDA) - TIF District No. 82-1 and Economic Development Plan JOINT RESOLUTION EDA RESOLUTION NO. COUNCIL RESOLUTION NO. ______ Rochester Economic Development Authority Rochester City Council County of Olmsted, State of Minnesota Approving Economic Development District No. 82 and the Corresponding Economic Development as well as Redevelopment Tax Increment Financing District No. 82-1 and a Corresponding Tax Increment Financing Plan. WHEREAS, it has been proposed that the Rochester Economic Development Authority (the “EDA”) establish Economic Development District No. 83 (the “Development District”), adopt the Economic Development Plan for the Development District (the “Development Plan”), establish DMC Redevelopment Tax Increment Financing District No. 82-1 (Civic Center North Apartments Project) within the Development District (the “TIF District”) and adopt a Tax Increment Financing Plan therefor (the “TIF Plan” and, together with the Development Plan, the “Plans”), all pursuant to and in conformity with applicable law, including Minnesota Statutes, Sections 469.001 through 469.047, Sections 469.090 through 469.1082, Sections 469.174 through 469.1794 (the “TIF Act”), and Minnesota Statutes, Sections 469.40 to 469.47 (the “DMC Act”), all as amended (collectively, the “Act”); all as reflected in that certain document entitled in part “Economic Development Plan for Economic Development District No. 82 of the Rochester Economic Development Authority and Tax Increment Financing Plan for DMC Redevelopment Tax Increment Financing District No. 82-1 (Civic Center North Apartments Project),” dated December 9, 2024, and presented for consideration by the Board of Commissioners (the “Board”) of the Rochester Economic Development Authority and the Common Council (the “Council”) of the City of Rochester, Minnesota (the “City”). WHEREAS, the Council and the Board have investigated the facts relating to the establishment of the Development District, the adoption of the Development Plan, the establishment of the TIF District and the adoption of the TIF Plan. WHEREAS, the TIF District is being established to facilitate the construction of approximately 243 market rate rental housing units (the “Market Rate Development”), approximately 76 affordable rental housing units (the “Affordable Development” and, together with the Market Rate Development, the “Development”), structured parking and other amenities located at 217 E Center Street, Rochester, MN 55904 in the City (the “Development”). WHEREAS, certain written reports and other documentation (collectively, the “Reports”) relating to the Plans, including the tax increment application made and other information supplied by Rochester Civic Lot Limited Partnership, a Minnesota limited RC110-146-990478.v4 partnership (or an entity formed by or affiliated with Sherman Associates Development LLC, the “Affordable Developer”) and Rochester Tower LLC, a Minnesota limited liability company (or an entity formed by or affiliated with Sherman Associates Development LLC, the “Market Rate Developer” and, together with the Affordable Developer, the “Developer) as to the activities contemplated therein have heretofore been assembled or prepared by staff or others and submitted to the Council and the Board and/or made a part of the City and EDA files and proceedings on the Plans. The Reports include data, information and/or substantiation constituting or relating to (1) why the assistance satisfies the so- called “but for” test and (2) the bases for the other findings and determinations made in this resolution. The Council and the Board hereby ratify and adopt the Reports, which are hereby incorporated into and made as fully a part of this resolution to the same extent as if set forth in full herein. WHEREAS, the TIF District is located within the boundaries of the Destination Medical Center Development District as defined in Minnesota Statutes, Section 469.40, Subdivision 5, as amended (the “DMC District”) as adopted in the Destination Medical Center Development Plan as defined in Minnesota Statutes, Section 469.40, Subdivision 6, as amended (the “DMC Development Plan”) and within the Downtown Waterfront subdistrict as described in the DMC Development Plan. The DMCC has approved the Development. WHEREAS, the EDA or the City has performed all actions required by law to be performed prior to the adoption and approval of the TIF Plan, including but not limited to notice to the County Commissioner representing the area of the County to be included in the TIF District, delivery of the TIF Plan to the County and School Board and the holding of a joint public hearing thereon by the City and the EDA following notice thereof published in the City’s official newspaper at least 10 but not more than 30 days prior to the public hearing. WHEREAS, the Council and the Board have on this date conducted a duly noticed public hearing regarding the sale of certain real property located near at 217 E Center Street in the City and currently identified by the following property identification numbers: 74.36.33.026857, 74.35.44.018553, 74.35.44.018546, 74.36.33.026854, 74.35.44.018547, 74.36.33.026855, 74.36.44.018548, 74.36.33.026856 (“EDA Property”) to Developer, at which all interested persons were given an opportunity to be heard. NOW, THEREFORE, BE IT RESOLVED by the Common Council of the City of Rochester, Olmsted County, Minnesota, and the Board of Commissioners of the Rochester Economic Development Authority as follows: Section 1. Findings for the Adoption and Approval of the Plans. 1.01. The Council and the Board hereby find that the Development District is proper and desirable to establish in the City and the Development Plan will afford maximum opportunity, consistent with the needs of the City as a whole, for the development of the Development District by private enterprise. 2 RC110-146-990478.v4 1.02. The Council and the Board hereby find that the TIF District is in the public interest and is a “redevelopment tax increment financing district within the area of the destination medical center development district to fund public infrastructure projects” within the meaning of Minnesota Statutes, Section 469.45, Subd. 4. Pursuant to the DMC Act, the EDA may establish a redevelopment tax increment financing district within the DMC District without meeting the requirements for redevelopment districts created pursuant to the general TIF Act, specifically, Minnesota Statutes, Sections 469.174, subdivision 10. 1.03. The Council and the Board hereby make the following additional findings in connection with the TIF District: (a) The Council and the Board further find that the proposed Development, in the opinion of the Council and the Board, would not occur solely through private investment within the reasonably foreseeable future and, therefore, the use of tax increment financing is deemed necessary. The specific basis for such finding being: The property on which the Development will occur would not be developed for purposes consistent with the DMC Development Plan in the reasonably foreseeable future. The rents for affordable housing projects do not provide a sufficient return on investment to stimulate new development. The Developer has represented that it could not proceed with this particular Development without tax increment assistance. (b) The Council and the Board further find that the TIF Plan conforms to the general plan for the development or redevelopment of the City as a whole. The specific basis for such finding being: The TIF Plan will generally complement and serve to implement policies adopted in the City’s comprehensive plan. The affordable and market rate rental housing contemplated on the property are in accordance with the existing zoning for the property. The Development is consistent with the DMC Development Plan. (c) The Council and the Board further find that the TIF Plan will afford maximum opportunity consistent with the sound needs of the City as a whole for the development of the TIF District by private enterprise. The specific basis for such finding being: The Development proposed to occur within the TIF District to be completed and operated by the Developer will afford maximum opportunity for the development of the applicable parcels consistent with the needs of the City. The Development will increase the taxable market valuation of the City, improve the quality and availability of affordable housing in the City and further the purposes 3 RC110-146-990478.v4 of the DMC Development Plan. The available multi-family housing in the City will expand by approximately 319 rental units with the completion of the Development and help fulfill the need for such housing in the City. (d) For purposes of compliance with Minnesota Statutes, Section 469.175, Subdivision 3(b)(2)(ii), the Council hereby finds that the increased market value of the site that could reasonably be expected to occur without the use of tax increment financing is approximately $0, which is less than $58,205,426 which is the increase in the market value estimated to result from the proposed development (approximately $70,892,800, assuming no annual inflation) after subtracting the present value of the projected tax increments for the maximum duration of the TIF District (approximately $12,687,374). Thus, the use of tax increment financing will be a positive net gain to the City, the School District, and the County, and the tax increment assistance does not exceed the benefit which will be derived therefrom. 1.04. The City and the EDA elect to retain all of the captured tax capacity to finance the costs of the TIF District and the Development District. 1.05. The provisions of this Section 2 are hereby incorporated by reference into and made a part of the TIF Plan. 1.06. The Council and the Board further find that the Plans are intended and in the judgment of the Council and the Board their effect will be to promote the public purposes and accomplish the objectives specified therein. The Council and the Board also intend that the EDA shall have and enjoy, with respect to the DMC Development District, the full range of powers and duties conferred upon the EDA pursuant to the Development Plan, the TIF Act, the DMC Act and such other legal authority as the EDA may have or enjoy from time to time. 1.07. The Development District and the TIF District are hereby established and the Plans, as presented to the Council and the Board on this date, including without limitation the findings and statements of objectives contained therein, are hereby approved, ratified, established, and adopted and shall be placed on file in the office of the Executive Director of the EDA, City or EDA staff shall, in writing, request the Olmsted County Auditor to certify the new TIF District and file the Plans with the Commissioner of Revenue and the Office of the State Auditor. 1.08. The Council and the Board find that the Development is a public infrastructure project within the meaning of Minnesota Statutes, Section 469.40, subdivision 11, which provides for: acquiring real property and other assets associated with the real property; remediating land as required to prepare the property for acquisition or development; installing, constructing or reconstructing elements of public infrastructure required to support the overall development of the DMC Development District; acquiring, constructing or reconstructing, or equipping parking facilities and other facilities to encourage intermodal transportation and public transit; making related site 4 RC110-146-990478.v4 improvements; and preparing land for private development; and that the City and the EDA approve the Development as consistent with the DMC Development Plan. PASSED AND ADOPTED BY THE BOARD OF COMMISSIONERS OF THE ROCHESTER ECONOMIC DEVELOPMENT AUTHORITY, THIS _9th__ DAY OF ___December__, 2024. PRESIDENT OF SAID AUTHORITY SECRETARY OF SAID AUTHORITY PASSED AND ADOPTED BY THE COMMON COUNCIL OF THE CITY OF ROCHESTER, MINNESOTA, THIS __________ DAY OF _______________, 2024. ___________________________________ PRESIDENT OF SAID COMMON COUNCIL ATTEST: __________________________ CITY CLERK APPROVED THIS _____ DAY OF ______________________, 2024. ___________________________________ MAYOR OF SAID CITY (Seal of the City of Rochester, Minnesota) 5 RC110-146-990478.v4